Early estimates indicate that the HFN Hedge Fund Aggregate Average, an equally-weighted average of all single manager hedge funds and CTA/managed futures products in the HedgeFund.net data
Early estimates indicate that the HFN Hedge Fund Aggregate Average, an equally-weighted average of all single manager hedge funds and CTA/managed futures products in the HedgeFund.net database, was up 3.27 per cent in September, the largest increase in more than four years and the second largest in eight years.
Funds across most strategies benefited from the US Federal Reserve’s attempt to ease extremely tight credit markets, as strategies that fared worst in August came back strong to erase previous month’s losses. Commodity-related funds performed extremely well as the Fed rate cut spurred inflationary concerns.
The HFN CTA/Managed Futures Average, with 234 funds reporting September performance, rose by 6.15 per cent and is up 7.11 per cent YTD. Energy sector funds also took advantage of oil rising above USD80 a barrel as HFN Energy Sector Average rose by 4.99 per cent in September and is up 13.95 per cent YTD. Emerging market funds returned an average of 4.60 per cent and the HFN Emerging Markets Average is up 16.79 per cent YTD.
Excellent performance wasn’t limited to commodity-related strategies, HedgeFund.net says. Equity markets surged after the US interest rate cut, and strategies that typically maintain long biases were rewarded. Long-only funds rose by 3.15 per cent in September and long/short equity managers by 2.98 per cent, and the HFN Long Only and Long/Short Equity averages are up by 10.55 per cent and 10.66 per cent YTD respectively.
The fact that long/short equity managers are outperforming long-only funds so far this year is probably down to maintaining short exposure during volatile periods. Other equity-related strategies that performed well in September were technology sector funds (up 8.33 per cent), small/micro cap funds (up 4.32 per cent), and healthcare funds (3.50 per cent).
Macro funds, which often position themselves across multiple asset classes, appear to have taken advantage of the strong moves seen in interest rate, currency and commodity markets. The average macro fund was up 3.93 per cent in September and the HFN Macro Average has risen 9.18 per cent YTD. Global macro was one of a handful of strategies tracked by HFN to outperform broad equity markets in the third quarter, returning 3.97 per cent during the difficult three-month period.
Distressed managers returned an average of 0.57 per cent in September, ending a two month streak of negative performance, but were still down 2.06 per cent in the third quarter and 5.85 per cent YTD, their worst performance over the first nine months of a year since 2002. Short bias funds were the only strategy posting negative returns in September with an average decline of 2.45 per cent, and the HFN Short Bias Average fell back to negative territory so far this year at 1.43 per cent down.
HedgeFund.net, a division of Channel Capital Group, offers hedge fund investors including institutional investors and high net worth individuals access to an online database of more than 7,700 hedge funds, funds of funds and CTA/managed futures products.
